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| Ticket and sponsorship business is brisk, the Cavs say, in anticipation of James’ arrival. |
The Cleveland Cavaliers' selection of LeBron James in last week's NBA draft marks the start of what team owner Gordon Gund said could be the franchise's first profitable season in seven years.
"We haven't been profitable since the season before the [NBA] lockout, and now we expect to see significant improvement in our revenues and close the gap greatly, if not be profitable," Gund said. "LeBron is someone who will instantly bring people out to watch, and he brings tremendous value."
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| Gund |
While Gund wouldn't share specific financial information about the team, he said increased revenue could come from sponsorship, premium-seating and media channels. It marks a stark change in outlook for a franchise that only 12 months ago sources said was on the sales block.
"Any team, from time to time, has inquiries, but I'm excited about moving in the right direction," said Gund, who added that he has no intention of selling the club. "Clearly, we have more work to do, but I want to see this thing through."
Gund, who has owned the Cavs for 20 years, said he promises to open his checkbook to attract better on-court talent as he retools his franchise through trades and free agency. He also said he will beef up security and public relations personnel to help James make the transition from high school megastar to one of the most hyped rookies ever to enter the league.
"You don't spent a lot of money on payroll unless you have a team that is competitive over the long term," Gund said. "Now we have the base, and I'm prepared to spend money. I don't want to stay in the middle of the pack. That's where you die."
The past few seasons have been financially grim for the Cavaliers, a team that last year won just 17 games. Before the start of last season, the Cavs saw a 20 percent drop in season-ticket sales. The team ended the 2002-03 season with the worst average attendance in the NBA at 11,497 fans a game, off 21 percent from the previous season, when the Cavs already ranked in the bottom quarter of NBA teams for average attendance.
With the on-court futility and erosion of the team's season-ticket base, the team in recent years slashed the number of available club seats at Gund Arena to 1,200 from 2,800, and many of the team's 90 luxury suites at the 20,500-seat facility were dark on game nights.
The arena carries the Gund name under terms of a 20-year, $14 million deal with Gund and his brother, George.
The team's financial slide caused Gund to order general manager Jim Paxson to slash payroll, sending high-priced veterans such as Shawn Kemp and Bob Sura packing while stocking the team with young players to make sure the Cavs stayed under the salary cap and dodged the NBA's luxury tax.
"We went through some tough times, and I can understand the fans not supporting the team because we didn't provide a great product," Gund said. "But now, we've got upside."
That upside came from the NBA lottery, in which Gund and the Cavs won the rights to draft James, who played high school basketball in nearby Akron.
Gund and team President Len Komoroski would not discuss the specifics of revenue increases already seen, but said business has been brisk since the team won the lottery.
"We've had a tremendous season-ticket renewal rate and, from a corporate end, we have significant interest in forming new relationships," Gund said.
The Cavs are negotiating a new cable deal with Fox Sports Net Ohio and are trying to lock up long-term sponsorship and premium seating deals. Since the May 22 lottery, the team has sold five luxury suites, with more deals expected shortly. The team also is close to a sponsorship deal for a new premium seating club to be added in Gund Arena for next season.
